Deloitte’s Global Life Sciences & Health Care industry leader, Greg Reh gives us an exclusive insight into their forecast for 2019’s industry trends.
For companies to address mounting pressures, a digital-first mindset will be required to make business operations more efficient and bring transformational therapies to the market.
Digital transformation will continue to be the focus of life science leaders in 2019. The megatrends in our 2019 Life Sciences Outlook show opportunities abound for biopharma, biotech, and MedTech companies to build new business models for the future.
As the sector continues to face pressure to drive prices down and demonstrate the value of their products, the use of outcomes-based payment models is expected to become more common. In response, health care stakeholders, including medical device manufacturers and biopharma companies, will need to accept more risk for the value that therapies provide. At the same time, biopharma companies will continue to seek ways to reverse the declining return on research and development investments, and they will need to adapt to the new regulatory frameworks that are expected to emerge in the year ahead.
These trends, taken collectively, are going to push life sciences companies to become more efficient, nimble, and customer-focused. Growth in the use of digital technologies, increased use of omics and real-world data (RWD), ongoing breakthroughs in the fundamental science behind therapies and cures, the incorporation of the patient voice throughout the lifecycle of therapy development, and new types of partnerships and collaborations are signaling a shift in how the life sciences sector will operate in 2019 and beyond.
Novel life sciences partnerships
Forward-thinking life sciences companies are starting to focus on expanding their ecosystem and creating rich networks. Novel partnerships are emerging that are more strategic and relationship-driven. A promising trend shows some life sciences companies engaging patients and regulators as partners. Others are learning how to work with nontraditional partners, like startups and tech giants. More outsourcing is predicted as life sciences companies’ needs for advanced technologies and manufacturing capabilities grow. New types of vendor relationships are being developed that are more collaborative than transactional.
Mobilizing life sciences data across the enterprise
Data is fast becoming the currency of life sciences. To create value, data should not remain in silos. Data needs to be mobilized and made available to cross-functional teams. Sharing data across the enterprise is still a cultural challenge for many legacy companies, but new external enterprise platforms are providing expertise. Collaboration across the enterprise can be key to leveraging data and delivering an exceptional patient experience.
Becoming obsessed with patient experience
Technology companies, like Amazon, are ‘obsessed’ with customer experience and steadfastly moving into healthcare. Consumers want healthcare that is simplified and personalized and companies who are more patient-centric. This can be a paradigm shift for many life sciences companies who are used to physicians as customers, not patients. Collaboration between technology companies and life sciences can be symbiotic.
Digital technology has the potential to change everything – from the way R&D is conducted, to how clinical trials are designed and how new products are commercialized. But many companies are still in the experimental stage when it comes to digital, and have been reluctant to make bold moves, according to a survey of biopharma executives that we conducted with the MIT Sloan Management Review.
For companies to address mounting pressures, a digital-first mindset will be required to make business operations more efficient and bring transformational therapies to the market. We expect to see more adoption of technologies such as robotic-process automation (RPA), which can help improve the efficiency of R&D including clinical trials. Cognitive and artificial intelligence and RWD will continue to transform the way new innovations are developed.
Software is now a medical device, and the Internet of Medical Things (IoMT) is growing rapidly. Apple became the first tech giant to receive an FDA clearance for its electrocardiogram (ECG) app for Apple Watch Series 4. According to Deloitte research, more than half of MedTech companies are implementing new business models based on connected medical devices. With billions of devices already connected in the IoMT, there is a growing need to minimize third-party risk and manage ‘cyber everywhere’. As life sciences companies are ultimately accountable, they should consider aligning with vendors who share their values and risk profiles.
The human side of digital transformation
While today’s technologies are transformative, digital transformation is not about adopting a particular technology or device. Transformation is about using technology symbiotically and strategically. In the continuous loop of information and action between the physical and digital worlds, the human aspect remains critical, especially for the patient.
Finding talent with soft skills, like empathy, can be as important as finding talent with digital and data skills. As some leaders from outside the sector are hired by life sciences, we will likely see more people who are empowered to think differently and not mired by challenges and uncertainty. This is the year for novel partnerships and unexpected opportunities. Companies who are able to focus and transform into digital enterprises can remain competitive in 2019.
10 Questions for the C-Suite in 2019
The pressing questions we want answers to from the people leading the industry:
- How will you accelerate change in your organization?
- What will sustain you in times of consistent change?
- What strategy can you commit to, for the long term?
- Based on your strategy, what is available in-house vs. what you need to get externally?
- How will you handle your extended enterprise risk?
- Are the right governance and partnership models in place to cultivate relationships with nontraditional partners?
- How will you demonstrate value?
- What is your new market access and pricing strategy?
- What steps can you take to transform customer interactions into an “obsession for customer experience”?
- What actions can you take that will benefit patients in the IoMT?
For more, including actions to take for 2019, I invite you to read the complete Deloitte 2019 Life Sciences Outlook.